SIX Swiss Exchange

The beginning of a new era.

Description

The SIX Swiss Exchange is Switzerland's national stock exchange. On July 6th, 2018, SIX announced intentions to launch a full end-to-end integrated digital asset trading, settlement, and custody service to be rolled out in mid-2019.

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Vision

SIX intends to create an ecosystem that encompasses traditional equity and digital asset trading. The proposed approach "will provide a bridge for clients from the traditional to the new world, in a timeframe which allows clients to choose for themselves how and when to avail themselves of the new opportunities the new ecosystem provides."

Team

CEO Jos Dijsselhof served 20 years in the banking industry. His tenure at ABN AMRO began in 1994 and lasted for 14 years, seeing him assume the role of Global Head Financial Markets Operations and Head Operations Asia Pacific thereafter. Following a horizontal move to Royal Bank of Scotland where he assumed a similar role, Dijsselhof became General Manager Group Hubs for ANZ Bank. There he was responsible for business development in China, India, the Philippines, and Fiji. Following ANZ, Dijsselhof became Interim Group CEO and subsequently COO at European exchange powerhouse Euronext. After 3 years, he moved on to become CEO at SIX Swiss Exchange in 2017.
Head Securities & Exchanges Thomas Zeeb is responsible for trading and post-trade infrastructure at SIX Group AG. This includes the SIX Swiss Exchange, the SIX Digital Exchange (developed for security token trading), and various other business lines. He has extensive experience in trading and settlements, having worked at both Deutsche Bank, Bank of New York, and Clearstream in Luxembourg, a subsidiary of the Deutsche Börse.

Business Model

Traders and investors who transact on the SIX trading venue will pay a small percentage or fixed transaction fee, which SIX will recognize as revenue.

Problem

Initial security token offerings are challenging from a technological and regulatory perspective in and of themselves, but without liquidity on the secondary markets, security tokens lose much of their advantage against traditional private equity.

Solution

SIX intends to launch a service to "provide a safe environment for issuing and trading digital assets, and enable the tokenization of existing securities and non-bankable assets to make previously untradeable assets tradeable."

Traction

SIX Swiss Exchange regularly reports daily trading volume in the billions of dollars. For example, total trading volume reported for 21.09.2018 at 23:10:01 was USD$10,795,223,516.

Competition

SIX will face competition from security token exchanges and increasingly from partnerships between other crypto exchanges and small national stock exchanges.
Crypto exchanges boast high volumes of turnover, existing product and a captive audience of crypto traders. Small national stock exchanges similarly have access to high trade volumes, already established regulatory compliance frameworks, and large user bases.

Market Opportunity

Considering the nascent stage of STO, early liquidity for security tokens may be limited, but not insignificant. According to the World Federation of Exchanges database, 2017 saw a total of $77.566 trillion dollars in equity market turnover globally. If the assumption is made that any equity issuer can also be a security token issuer, and if it is assumed that private companies will also launch STO, the total market opportunity for exchanges may exceed $77.566 trillion dollars in turnover per year.

Route-to-Market

SIX Group AG's strategy towards the security token market is leveraged off of its existing business lines. Their July 6th, 2018 announcement of plans to create a security token exchange states that they will offer security token trading services to existing clients in a way that they may " choose for themselves how and when to avail themselves of the new opportunities the new ecosystem provides."
As one of the major equities exchanges in the world, SIX Group AG have an unfair advantage in that they can market security token trading directly to their existing deep customer base.

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Security Token Network is not a registered broker-dealer or investment advisor in any jurisdiction. You cannot invest in any financial product or buy tokens through our website. Nothing published on Security Token Network should be constituted as investment advice or an endorsement of any project. All investments entail risk and you should seek professional investment advice from a licensed financial advisor before making any investment.

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